LARC's Esposito on Breeding and Racing in South America

Horacio Esposito, president of the Latin American Racing Channel, has been involved in Thoroughbred breeding and racing in South America for the majority of his life. The Argentina native has had success in many ventures—in racing and in business—and for the last seven years has been involved with the advancement of Organización Latinoamericana de Fomento del Sangre Pura de Carrera (OSAF).

OSAF is composed of the major Latin American jockey clubs, racetracks, stud books, and Thoroughbred breeders and owners associations of Argentina, Brazil, Colombia, Chile, Ecuador, Mexico, Panama, Paraguay, Peru, Uruguay, and Venezuela.

Among the many objectives of OSAF are to promote the thorough exchange of information worldwide, to promote the harmonization of protocols and regulations within the region, to promote breeding and its related activities, contribute to the solution of problems that affect the evolution and development of the horse racing and breeding activities, and actively take part in the major international organizations.

Like any other organization, OSAF faces hurdles and challenges, and much like racing in the United States, the separate jurisdictions have different rules and regulations regarding medication and simulcasting.

On the eve of the continent's richest race, the March 11 Longines Gran Premio Latinoamericano (G1) run at Maronas Racetrack in Montevideo, Uruguay, Esposito spoke with BloodHorse to discuss the organization's main issues.

BloodHorse: How important is Sunday's Latinoamericano to racing in South America?

Horacio Esposito: The race is the most important one. But since we change the racetrack every year, it's not easy to promote it as the biggest day at that track. It will be important, but not as big as the Gran Premio Jose Pedro Ramirez (G1) day here at Maronas. I hope the day will push and challenge the breeders in Uruguay.

It's unfortunate there are no horses from Chile this year. There is a quarantine going with influenza. The border was closed to export horses three or four weeks ago, just after their Derby in February.

This is also the last year for Longines as a sponsor. This is the last year of a five-year deal. But we do know next year we will be at Club Hipico (in Santiago, Chile) and the next year at San Isidro in Argentina.

BH: How important has Longines been as a partner?

HE: This partnership is not just important with the money, but they push for quality. That's what they believe in, and we all need to improve the standards in the best way with the leaders of the world.

BH: What are some of the accomplishments of OSAF?

HE: The international ratings are the main thing. We didn't have any kind of system. We worked with different handicappers and formed our own committee for control in grading the races. When we started we had many too many races that were graded that we needed to get rid of, because of the quality of the fields. It has worked well.

You cannot compare our black type with the other countries. It's a fair discussion. It is my job to defend the South America black type and try to work to do everything I can do to get better purses for these races and see that the horses can go outside of the continent and win. I believe in the competition. I believe in the sport.

BH: One of the goals of OSAF is to raise the South American brand worldwide. What are the challenges?

HE: The discussion between South America and the world is, of course, we don't receive horses from outside the continent. You used to watch races with horses from different countries—Breeders' Cup, Europe, Hong Kong, Dubai. There were horses from Ireland, France, the U.S., England, Australia—wherever. We don't have this chance here. We don't have the prize money—the horses go where the money is.

It's hard to get horses from outside South America to come here. The main horses will not come with this prize money. The competition is not comparable ... you can say that's fair sometimes.

The only way to compare quality in South America is when you send it outside South America. What happens when we send? Generally we don't send, because we need to wait for someone to buy the horse.

BH: A major segment at last year's Pan-American conference in Washington, D.C., was on the progress of a testing lab at San Isidro. Is there an update here?

HE: I'm not in favor of medication. I side with Europe and Asia on this. So you can imagine we are trying to avoid medication. I believe we need to abolish it.

The issue is it's not the same in every country. Every country has its own legislation, so we are trying to push them all into one direction on rules and medication. They need to be the same. Brazil was the first one to eliminate medication in black-type races.

We are trying to do everything to have an approved lab by the (International Federation of Horseracing Autorities). We need some more time to make some investments in the lab, plus to make sure we cover the requirements internationally. Sometimes South Americans think we have the best labs, but we don't have the best labs. Also, we need to convince the main racetracks in the region to send the samples there. At least the black-type race samples need to be tested here.

BH: How has LARC's business progressed internationally?

HE: We have a sport that is exciting. We send thousands of races to the United States (through simulcasting). Sometimes Frank Stronach (of The Stronach Group) says why is there no reciprocity? We are representing Chile, Argentina, etc.

Most of the business mentalities are the same. There is a lot of protectionism. ... We cannot allow foreign races in our market, because this will cheapen our industry. It's a big deal, not for more profits (but) for the people who run the tracks. It's a pity, because the people are not allowed to watch what else is going on in the world.

BH: What lies ahead for breeders in South America?

HE: The future is now. I'm concerned about South America's future. There is an issue in Argentina right now, and it is a big one that is affecting the purses. For the breeders it's not easy to see the future. It's complicated. Some very important farms are closing here.

Argentina is the South American leader that once had a foal crop of about 8,500. Now it is less—down to about 7,000. Brazil's foal crop is in decline. Chile is reverent today, because they have the most important breeders in South America, like Mr. (Carlos) Heller.

The mare population is not being replenished in Argentina and Uruguay, and we don't have the stallions we used to have. In Argentina, it was very clear that we were going to have this situation many years ago. Sometimes two plus two is four, and nobody wanted to say it.

The main racetracks have subsidies for purses, but now the government has cut purses of the subsidies—25% at San Isidro and La Plata is seeing a 30% reduction in purses. Now, the government wants to give zero subsidy. At present the subsidy is responsible for about 70% of the purses.

The former government was really responsible for this situation. They were responsible for the mentality, and the mentality is, they didn't understand how the industry exists. The horse industry has changed ... a lot. It's business, yes, but it's also stallions, mares, foals. ... The government's mentality is, "this is just gaming."